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Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.   Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.

Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.   Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 9E
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Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
 
Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.*
2. Journalize the entries to record the following:*
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)
b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)
3. Determine the total interest expense for 20Y1.
4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.
Present Value Tables Journal 31 0.29646 0.25550 0.22036 0.19018 0.16425 0.14196 0.12277 32 0.28506 0.24450 0.20987 0.18027 0.15496 0.13329 0.11474 0.27409 0.23397 0.19987 0.17087 0.14619 0.12516 0.10723 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Round to the nearest dollar. 33 34 0.26355 0.22390 0.19035 0.16196 0.13791 0.11752 0.10022 Chart of Accounts X, 35 0.25342 0.21425 0.18129 0.15352 0.13011 0.11035 0.09366 PAGE 10 40 0.20829 0.17193 0.14205 0.11746 0.09722 0.08054 0.06678 CHART OF ACCOUNTS JOURNAL 45 0.17120 0.13796 0.11130 0.08988 0.07265 0.05879 0.04761 ACCOUNTING FOLUATION Campbell Inc. DATE POST. REF. CREDIT DESCRIPTION DEBIT ASSETS LIABILITIES EQUITY 50 0.14071 0.11071 0.08720 0.06877 0.05429 0.04291 0.03395 1 General Ledger 2 Present Value of Ordinary Annuity of $1 per Period Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% ASSETS REVENUE 3 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 110 Cash 410 Sales 4 2 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 111 Petty Cash 610 Interest Revenue 5 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 121 Accounts Receivable 611 Gain on Redemption of Bonds 6 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 122 Allowance for Doubtful Accounts 5 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 126 Interest Receivable EXPENSES 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 127 Notes Receivable 510 Cost of Merchandise Sold PAGE 11 7 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 131 Merchandise Inventory 515 Credit Card Expense JOURNAL 8 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 141 Office Supplies 516 Cash Short and Over 7.43533 ACCOUNTING FOLUATION ASSETS 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 142 Store Supplies 521 Sales Salaries Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT LIABILITIES EQUITY 10 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 151 Prepaid Insurance 522 Office Salaries Expense 11 8.76048 8.52892 8.30641 8.09254 7.88687 7.68904 7.49867 191 Land 531 Advertising Expense 12 9.38507 9.11858 8.86325 8.61852 8.38384 8.15873 7.94269 192 Store Equipment 532 Delivery Expense 13 9.98565 9.68285 9.39357 9.11708 8.85268 8.59974 8.35765 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense the 14 10.56312 10.22283 9.89864 9.58965 9.29498 9.01384 8.74547 194 Office Equipment 534 Selling Expenses is 15 11.11839 10.73955 10.37966 10.03758 9.71225 9.40267 9.10791 195 Accumulated Depreciation-Office Equipment 535 Rent Expense Instructions 16 11.65230 11.23402 10.83777 10.46216 10.10590 9.76776 9.44665 536 Insurance Expense 17 12.16567 11.70719 11.27407 10.86461 10.47726 10.11058 9.76322 LIABILITIES 537 Office Supplies Expense Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 18 12.65930 12.15999 11.68959 11.24607 10.82760 10.43247 10.05909 210 Accounts Payable 538 Store Supplies Expense 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar 19 13.13394 12.59329 12.08532 11.60765 11.15812 10.73471 10.33560 221 Salaries Payable 541 Bad Debt Expense year. 20 13.59033 13.00794 12.46221 11.95038 11.46992 11.01851 10.59401 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment Required: 21 14.02916 13.40472 12.82115 12.27524 11.76408 11.28498 10.83553 232 Interest Payable 562 Depreciation Expense-Office Equipment 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 22 14.45112 13.78442 13.16300 12.58317 12.04158 11.53520 11.06124 241 Notes Payable 590 Miscellaneous Expense 2. Journalize the entries to record the following:* 23 14.85684 14.14777 13.48857 12.87504 12.30338 11.77014 11.27219 251 Bonds Payable 710 Interest Expense a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. 24 15.24696 14.49548 13.79864 13.15170 12.55036 11.99074 11.46933 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds (Round to the nearest dollar.) 25 15.62208 14.82821 14.09394 13.41393 12.78336 12.19788 11.65358 253 Premium on Bonds Payable b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest 26 15.98277 15.14661 14.37519 13.66250 13.00317 12.39237 11.82578 dollar.) 27 16.32959 15.45130 14.64303 13.89810 13.21053 12.57500 11.98671 EQUITY 3. Determine the total interest expense for 20Y1. 28 16.66306 15.74287 14.89813 14.12142 13.40616 12.74648 12.13711 311 Common Stock 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 29 16.98371 16.02189 15.14107 14.33310 13.59072 12.90749 12.27767 312 Paid-In Capital in Excess of Par-Common Stock 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) 30 17.29203 16.28889 15.37245 14.53375 13.76483 13.05868 12.40904 315 Treasury Stock *Refer to the Chart of Accounts for exact wording of account titles. 31 17.58849 16.54439 15.59281 14.72393 13.92909 13.20063 12.53181 321 Preferred Stock 32 17.87355 16.78889 15.80268 14.90420 14.08404 13.33393 12.64656 322 Paid-In Capital in Excess of Par-Preferred Stock 33 18.14765 17.02286 16.00255 15.07507 14.23023 13.45909 12.75379 331 Paid-In Capital from Sale of Treasury Stock 34 18.41120 17.24676 16.19290 15.23703 14.36814 13.57661 12.85401 340 Retained Earnings 35 18.66461 17.46101 16.37419 15.39055 14.49825 13.68696 12.94767 351 Cash Dividends 40 19.79277 18.40158 17.15909 16.04612 15.04630 14.14553 13.33171 352 Stock Dividends 45 20.72004 19.15635 17.77407 16.54773 15.45583 14.48023 13.60552 50 21.48218 19.76201 18.25593 16.93152 15.76186 14.72452 13.80075
Transcribed Image Text:Present Value Tables Journal 31 0.29646 0.25550 0.22036 0.19018 0.16425 0.14196 0.12277 32 0.28506 0.24450 0.20987 0.18027 0.15496 0.13329 0.11474 0.27409 0.23397 0.19987 0.17087 0.14619 0.12516 0.10723 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Round to the nearest dollar. 33 34 0.26355 0.22390 0.19035 0.16196 0.13791 0.11752 0.10022 Chart of Accounts X, 35 0.25342 0.21425 0.18129 0.15352 0.13011 0.11035 0.09366 PAGE 10 40 0.20829 0.17193 0.14205 0.11746 0.09722 0.08054 0.06678 CHART OF ACCOUNTS JOURNAL 45 0.17120 0.13796 0.11130 0.08988 0.07265 0.05879 0.04761 ACCOUNTING FOLUATION Campbell Inc. DATE POST. REF. CREDIT DESCRIPTION DEBIT ASSETS LIABILITIES EQUITY 50 0.14071 0.11071 0.08720 0.06877 0.05429 0.04291 0.03395 1 General Ledger 2 Present Value of Ordinary Annuity of $1 per Period Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% ASSETS REVENUE 3 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 110 Cash 410 Sales 4 2 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 111 Petty Cash 610 Interest Revenue 5 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 121 Accounts Receivable 611 Gain on Redemption of Bonds 6 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 122 Allowance for Doubtful Accounts 5 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 126 Interest Receivable EXPENSES 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 127 Notes Receivable 510 Cost of Merchandise Sold PAGE 11 7 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 131 Merchandise Inventory 515 Credit Card Expense JOURNAL 8 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 141 Office Supplies 516 Cash Short and Over 7.43533 ACCOUNTING FOLUATION ASSETS 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 142 Store Supplies 521 Sales Salaries Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT LIABILITIES EQUITY 10 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 151 Prepaid Insurance 522 Office Salaries Expense 11 8.76048 8.52892 8.30641 8.09254 7.88687 7.68904 7.49867 191 Land 531 Advertising Expense 12 9.38507 9.11858 8.86325 8.61852 8.38384 8.15873 7.94269 192 Store Equipment 532 Delivery Expense 13 9.98565 9.68285 9.39357 9.11708 8.85268 8.59974 8.35765 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense the 14 10.56312 10.22283 9.89864 9.58965 9.29498 9.01384 8.74547 194 Office Equipment 534 Selling Expenses is 15 11.11839 10.73955 10.37966 10.03758 9.71225 9.40267 9.10791 195 Accumulated Depreciation-Office Equipment 535 Rent Expense Instructions 16 11.65230 11.23402 10.83777 10.46216 10.10590 9.76776 9.44665 536 Insurance Expense 17 12.16567 11.70719 11.27407 10.86461 10.47726 10.11058 9.76322 LIABILITIES 537 Office Supplies Expense Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 18 12.65930 12.15999 11.68959 11.24607 10.82760 10.43247 10.05909 210 Accounts Payable 538 Store Supplies Expense 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar 19 13.13394 12.59329 12.08532 11.60765 11.15812 10.73471 10.33560 221 Salaries Payable 541 Bad Debt Expense year. 20 13.59033 13.00794 12.46221 11.95038 11.46992 11.01851 10.59401 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment Required: 21 14.02916 13.40472 12.82115 12.27524 11.76408 11.28498 10.83553 232 Interest Payable 562 Depreciation Expense-Office Equipment 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 22 14.45112 13.78442 13.16300 12.58317 12.04158 11.53520 11.06124 241 Notes Payable 590 Miscellaneous Expense 2. Journalize the entries to record the following:* 23 14.85684 14.14777 13.48857 12.87504 12.30338 11.77014 11.27219 251 Bonds Payable 710 Interest Expense a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. 24 15.24696 14.49548 13.79864 13.15170 12.55036 11.99074 11.46933 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds (Round to the nearest dollar.) 25 15.62208 14.82821 14.09394 13.41393 12.78336 12.19788 11.65358 253 Premium on Bonds Payable b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest 26 15.98277 15.14661 14.37519 13.66250 13.00317 12.39237 11.82578 dollar.) 27 16.32959 15.45130 14.64303 13.89810 13.21053 12.57500 11.98671 EQUITY 3. Determine the total interest expense for 20Y1. 28 16.66306 15.74287 14.89813 14.12142 13.40616 12.74648 12.13711 311 Common Stock 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 29 16.98371 16.02189 15.14107 14.33310 13.59072 12.90749 12.27767 312 Paid-In Capital in Excess of Par-Common Stock 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) 30 17.29203 16.28889 15.37245 14.53375 13.76483 13.05868 12.40904 315 Treasury Stock *Refer to the Chart of Accounts for exact wording of account titles. 31 17.58849 16.54439 15.59281 14.72393 13.92909 13.20063 12.53181 321 Preferred Stock 32 17.87355 16.78889 15.80268 14.90420 14.08404 13.33393 12.64656 322 Paid-In Capital in Excess of Par-Preferred Stock 33 18.14765 17.02286 16.00255 15.07507 14.23023 13.45909 12.75379 331 Paid-In Capital from Sale of Treasury Stock 34 18.41120 17.24676 16.19290 15.23703 14.36814 13.57661 12.85401 340 Retained Earnings 35 18.66461 17.46101 16.37419 15.39055 14.49825 13.68696 12.94767 351 Cash Dividends 40 19.79277 18.40158 17.15909 16.04612 15.04630 14.14553 13.33171 352 Stock Dividends 45 20.72004 19.15635 17.77407 16.54773 15.45583 14.48023 13.60552 50 21.48218 19.76201 18.25593 16.93152 15.76186 14.72452 13.80075
Journal Present Value Tables Two present value tables are provided: Present Value of $1 at Compound Interest Due in n Periods and Present Value of Ordinary Annuity of $1 per Period. Use them as directed in the problem requirements. 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Round to the nearest dollar. Present Value of $1 at Compound Interest Due in n Periods Chart of Accounts Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% PAGE 10 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 CHART OF ACCOUNTS JOURNAL 2 0.92456 0.91573 0.90703 0.89845 0.89000 0.88166 0.87344 ACCOUNTING FOLUATION EQUITY 3 0.88900 0.87630 0.86384 0.85161 0.83962 0.82785 0.81630 Campbell Inc. DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES 1 4 0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 General Ledger 2 5 0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 6 0.79031 0.76790 0.74622 0.72525 0.70496 0.68533 0.66634 ASSETS REVENUE 3 7 0.75992 0.73483 0.71068 0.68744 0.66506 0.64351 0.62275 110 Cash 410 Sales 4 8 0.73069 0.70319 0.67684 0.65160 0.62741 0.60423 0.58201 111 Petty Cash 610 Interest Revenue 5 9 0.70259 0.67290 0.64461 0.61763 0.59190 0.56735 0.54393 121 Accounts Receivable 611 Gain on Redemption of Bonds 10 0.67556 0.64393 0.61391 0.58543 0.55839 0.53273 0.50835 122 Allowance for Doubtful Accounts 11 0.64958 0.61620 0.58468 0.55491 0.52679 0.50021 0.47509 126 Interest Receivable EXPENSES 12 0.62460 0.58966 0.55684 0.52598 0.49697 0.46968 0.44401 127 Notes Receivable 510 Cost of Merchandise Sold PAGE 11 13 0.60057 0.56427 0.53032 0.49856 0.46884 0.44102 0.41496 131 Merchandise Inventory 515 Credit Card Expense Final Questions JOURNAL 14 0.57748 0.53997 0.50507 0.47257 0.44230 0.41410 0.38782 141 Office Supplies 516 Cash Short and Over 3. Determine the total interest expense for 20Y1. ACCOUNTING FOLUATION ASSETS 521 Sales Salaries Expense DATE LIABILITIES 15 0.55526 0.51672 0.48102 0.44793 0.41727 0.38883 0.36245 142 Store Supplies DESCRIPTION POST. REF. DEBIT CREDIT EQUITY Enter amount as a positive number. 16 0.53391 0.49447 0.45811 0.42458 0.39365 0.36510 0.33873 151 Prepaid Insurance 522 Office Salaries Expense $ 17 0.51337 0.47318 0.43630 0.40245 0.37136 0.34281 0.31657 191 Land 531 Advertising Expense 18 0.49363 0.45280 0.41552 0.38147 0.35034 0.32189 0.29586 192 Store Equipment 532 Delivery Expense 19 0.47464 0.43330 0.39573 0.36158 0.33051 0.30224 0.27651 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is 20 0.45639 0.41464 0.37689 0.34273 0.31180 0.28380 0.25842 194 Office Equipment 534 Selling Expenses 195 Accumulated Depreciation-Office Equipment 535 Rent Expense greater than the market rate of interest? 21 0.43883 0.39679 0.35894 0.32486 0.29416 0.26648 0.24151 Instructions 22 0.42196 0.37970 0.34185 0.30793 0.27751 0.25021 0.22571 536 Insurance Expense O Yes 23 0.40573 0.36335 0.32557 0.29187 0.26180 0.23494 0.21095 LIABILITIES 537 Office Supplies Expense Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of No 24 0.39012 0.34770 0.31007 0.27666 0.24698 0.22060 0.19715 210 Accounts Payable 538 Store Supplies Expense 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar 25 0.37512 0.33273 0.29530 0.26223 0.23300 0.20714 0.18425 221 Salaries Payable 541 Bad Debt Expense year. 26 0.36069 0.31840 0.28124 0.24856 0.21981 0.19450 0.17220 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 5. Compute the price of $15,821,074 received for 562 Depreciation Expense-Office Equipment the bonds by using the present value tables. Roun Required: 27 0.34682 0.30469 0.26785 0.23560 0.20737 0.18263 0.16093 232 Interest Payable 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 28 0.33348 0.29157 0.25509 0.22332 0.19563 0.17148 0.15040 241 Notes Payable 590 Miscellaneous Expense to the nearest dollar. 2. Journalize the entries to record the following:* 29 0.32065 0.27902 0.24295 0.21168 0.18456 0.16101 0.14056 251 Bonds Payable 710 Interest Expense a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. 30 0.30832 0.26700 0.23138 0.20064 0.17411 0.15119 0.13137 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds Present value of 2$ (Round to the nearest dollar.) 0.29646 0.25550 0.22036 0.19018 0.16425 0.14196 0.12277 253 Premium on Bonds Payable 31 the face amount b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest 32 0.28506 0.24450 0.20987 0.18027 0.15496 0.13329 0.11474 Present value of dollar.) 33 0.27409 0.23397 0.19987 0.17087 0.14619 0.12516 0.10723 EQUITY the semiannual 3. Determine the total interest expense for 20Y1. 34 0.26355 0.22390 0.19035 0.16196 0.13791 0.11752 0.10022 311 Common Stock interest payments 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 0.25342 0.21425 0.18129 0.15352 0.13011 312 Paid-In Capital in Excess of Par-Common Stock 35 0.11035 0.09366 Price ceived 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) 40 0.20829 0.17193 0.14205 0.11746 0.09722 0.08054 0.06678 315 Treasury Stock $ the bonds *Refer to the Chart of Accounts for exact wording of account titles. 45 0.17120 0.13796 0.11130 0.08988 0.07265 0.05879 0.04761 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 50 0.14071 0.11071 0.08720 0.06877 0.05429 0.04291 0.03395 331 Paid-In Capital from Sale of Treasury Stock %3D Present Value of Ordinary Annuity of $1 per Period 340 Retained Earnings Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% 351 Cash Dividends 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 352 Stock Dividends 2 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 5 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020
Transcribed Image Text:Journal Present Value Tables Two present value tables are provided: Present Value of $1 at Compound Interest Due in n Periods and Present Value of Ordinary Annuity of $1 per Period. Use them as directed in the problem requirements. 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Round to the nearest dollar. Present Value of $1 at Compound Interest Due in n Periods Chart of Accounts Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% PAGE 10 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 CHART OF ACCOUNTS JOURNAL 2 0.92456 0.91573 0.90703 0.89845 0.89000 0.88166 0.87344 ACCOUNTING FOLUATION EQUITY 3 0.88900 0.87630 0.86384 0.85161 0.83962 0.82785 0.81630 Campbell Inc. DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES 1 4 0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 General Ledger 2 5 0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 6 0.79031 0.76790 0.74622 0.72525 0.70496 0.68533 0.66634 ASSETS REVENUE 3 7 0.75992 0.73483 0.71068 0.68744 0.66506 0.64351 0.62275 110 Cash 410 Sales 4 8 0.73069 0.70319 0.67684 0.65160 0.62741 0.60423 0.58201 111 Petty Cash 610 Interest Revenue 5 9 0.70259 0.67290 0.64461 0.61763 0.59190 0.56735 0.54393 121 Accounts Receivable 611 Gain on Redemption of Bonds 10 0.67556 0.64393 0.61391 0.58543 0.55839 0.53273 0.50835 122 Allowance for Doubtful Accounts 11 0.64958 0.61620 0.58468 0.55491 0.52679 0.50021 0.47509 126 Interest Receivable EXPENSES 12 0.62460 0.58966 0.55684 0.52598 0.49697 0.46968 0.44401 127 Notes Receivable 510 Cost of Merchandise Sold PAGE 11 13 0.60057 0.56427 0.53032 0.49856 0.46884 0.44102 0.41496 131 Merchandise Inventory 515 Credit Card Expense Final Questions JOURNAL 14 0.57748 0.53997 0.50507 0.47257 0.44230 0.41410 0.38782 141 Office Supplies 516 Cash Short and Over 3. Determine the total interest expense for 20Y1. ACCOUNTING FOLUATION ASSETS 521 Sales Salaries Expense DATE LIABILITIES 15 0.55526 0.51672 0.48102 0.44793 0.41727 0.38883 0.36245 142 Store Supplies DESCRIPTION POST. REF. DEBIT CREDIT EQUITY Enter amount as a positive number. 16 0.53391 0.49447 0.45811 0.42458 0.39365 0.36510 0.33873 151 Prepaid Insurance 522 Office Salaries Expense $ 17 0.51337 0.47318 0.43630 0.40245 0.37136 0.34281 0.31657 191 Land 531 Advertising Expense 18 0.49363 0.45280 0.41552 0.38147 0.35034 0.32189 0.29586 192 Store Equipment 532 Delivery Expense 19 0.47464 0.43330 0.39573 0.36158 0.33051 0.30224 0.27651 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is 20 0.45639 0.41464 0.37689 0.34273 0.31180 0.28380 0.25842 194 Office Equipment 534 Selling Expenses 195 Accumulated Depreciation-Office Equipment 535 Rent Expense greater than the market rate of interest? 21 0.43883 0.39679 0.35894 0.32486 0.29416 0.26648 0.24151 Instructions 22 0.42196 0.37970 0.34185 0.30793 0.27751 0.25021 0.22571 536 Insurance Expense O Yes 23 0.40573 0.36335 0.32557 0.29187 0.26180 0.23494 0.21095 LIABILITIES 537 Office Supplies Expense Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $14,000,000 of 10-year, 11% bonds at a market (effective) interest rate of No 24 0.39012 0.34770 0.31007 0.27666 0.24698 0.22060 0.19715 210 Accounts Payable 538 Store Supplies Expense 9%, receiving cash of $15,821,074. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar 25 0.37512 0.33273 0.29530 0.26223 0.23300 0.20714 0.18425 221 Salaries Payable 541 Bad Debt Expense year. 26 0.36069 0.31840 0.28124 0.24856 0.21981 0.19450 0.17220 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 5. Compute the price of $15,821,074 received for 562 Depreciation Expense-Office Equipment the bonds by using the present value tables. Roun Required: 27 0.34682 0.30469 0.26785 0.23560 0.20737 0.18263 0.16093 232 Interest Payable 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 28 0.33348 0.29157 0.25509 0.22332 0.19563 0.17148 0.15040 241 Notes Payable 590 Miscellaneous Expense to the nearest dollar. 2. Journalize the entries to record the following:* 29 0.32065 0.27902 0.24295 0.21168 0.18456 0.16101 0.14056 251 Bonds Payable 710 Interest Expense a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. 30 0.30832 0.26700 0.23138 0.20064 0.17411 0.15119 0.13137 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds Present value of 2$ (Round to the nearest dollar.) 0.29646 0.25550 0.22036 0.19018 0.16425 0.14196 0.12277 253 Premium on Bonds Payable 31 the face amount b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest 32 0.28506 0.24450 0.20987 0.18027 0.15496 0.13329 0.11474 Present value of dollar.) 33 0.27409 0.23397 0.19987 0.17087 0.14619 0.12516 0.10723 EQUITY the semiannual 3. Determine the total interest expense for 20Y1. 34 0.26355 0.22390 0.19035 0.16196 0.13791 0.11752 0.10022 311 Common Stock interest payments 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 0.25342 0.21425 0.18129 0.15352 0.13011 312 Paid-In Capital in Excess of Par-Common Stock 35 0.11035 0.09366 Price ceived 5. Compute the price of $15,821,074 received for the bonds by using the present value tables. (Round to the nearest dollar.) 40 0.20829 0.17193 0.14205 0.11746 0.09722 0.08054 0.06678 315 Treasury Stock $ the bonds *Refer to the Chart of Accounts for exact wording of account titles. 45 0.17120 0.13796 0.11130 0.08988 0.07265 0.05879 0.04761 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 50 0.14071 0.11071 0.08720 0.06877 0.05429 0.04291 0.03395 331 Paid-In Capital from Sale of Treasury Stock %3D Present Value of Ordinary Annuity of $1 per Period 340 Retained Earnings Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 7% 351 Cash Dividends 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 352 Stock Dividends 2 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 5 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020
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